Intuit Bookkeeping Professional Certificate TEST AND STUDY GUIDE NEWEST EXAM 2024 WITH Q, Exams of Nursing

Download Intuit Bookkeeping Professional Certificate TEST AND STUDY GUIDE NEWEST EXAM 2024 WITH Q and more Exams Nursing in PDF only on Docsity! Intuit Bookkeeping Professional Certificate TEST AND STUDY GUIDE NEWEST EXAM 2024 WITH QUESTIONS AND DETAILED ANSWERS GRADED A What are the 5 Account Types? - ANSWER>>- Assets - Liabilities - Equity - Revenue - Expenses What is the accounting formula? - ANSWER>>Assets = Liabilities + Equity What does DEA/LER stand for? - ANSWER>>- Debit Expenses and Assets - Credit Liabilities Equity Revenue What are the 5 steps of the Accounting-Cycle? - ANSWER>>1. Identify transactions 2. record transactions 3. run reports 4. adjusting entries 5. close the books What are the 4 Types of financial statements? - ANSWER>>- The income statement (aka P&L statement: Income, COGS, expenses) - The balance sheet (assets, liabilities, equity) - The statement of equity - The statement of cash flow What are the 4 types of accounting adjustments? - ANSWER>>- Deferrals - Accruals - Missing Transactions - Tax Adjustments What tasks would a bookkeeper do? - ANSWER>>- Handle bank feeds and reconciles bank accounts, managing accounts receivable/payable, and record financial transactions Mary Smith is the owner and operator of Smith Construction. At the end of the company's accounting period, December 31, 2020, Smith Construction has assets totaling $760,000 and liabilities totaling $240,000. Use the accounting equation to calculate what Mary's Owner Equity would be as of December 31, 2020. - ANSWER>>- $520,000 Mike Anderson is the owner and operator of Anderson Consulting. At the end of 2019, the company's assets totaled $500,000 and its liabilities totaled $175,000. Assuming that over the 2020 fiscal year, assets increased by $120,000 and liabilities increased by $72,000, use the accounting equation to determine what Mike's Owner's equity will be as of December 31, 2020? - ANSWER>>- $373,000 Maria Garcia owns a software consulting firm. At the beginning of 2019, her firm had assets of $800,000 and liabilities of $185,000. Assuming that assets decreased by $52,000 and liabilities increased by $24,000 during 2020, use the accounting equation to calculate equity at the end of 2020. - ANSWER>>- $539,000 The accounting equation can be defined as: - ANSWER>>- Assets = Liability + Equity What the company owns or controls and expects to gain value from is defined as: - ANSWER>>- An Asset What the company owes to others is defined as: - ANSWER>>- Liabilities The owner's stake in the company is defined as: - ANSWER>>- Equity Zach needs to determine what his company's financial position was on March 31st of last year. Which of the following would be the best report to look at? - ANSWER>>- Balance sheet Which of the following financial statements reports the sources and uses of cash by a business? - ANSWER>>- Statement of Cash Flow Which of the following lists general ledger account balances at the end of a reporting period, before any adjusting entries are made? - ANSWER>>- Unadjusted Trial Balance A trial balance that is prepared after taking into account all the adjusting entries is known as: - ANSWER>>- Adjusted Trial Balance The preparation of financial statements and closing the books is the ______ step of the accounting cycle. - ANSWER>>- last Rudiger has just recorded and posted his business transactions to the ledger. His next step in the accounting cycle is to _______. - ANSWER>>- prepare an unadjusted trial balance Francis enters a $100 check received from a customer into QuickBooks online. If she views the Transaction Journal, which account would show as being debited $100? - ANSWER>>- Business bank account The double-entry system of bookkeeping normally results in which of the following balances in the ledger accounts? - ANSWER>>- Debit: Assets and expenses - Credit: Liabilities, equity, and revenue In the first month of operations, Pepper Consulting's total debit entries to the cash account amounted to $900, and the total credit entries to the cash account amounted to $600. The cash account has a: - ANSWER>>- $300 debit balance Pepper Consulting bought computers with credit from PYO Suppliers and entered the purchase into QuickBooks. The transaction journal for Pepper Consulting would show the following entry: - ANSWER>>- Debit: Computers - Credit: PYO Credit Payable Which of the following financial statements provides a summary of a company's revenue and expenses over a period of time? - ANSWER>>- The Income Statement Which of the following financial statements provides you with the owner's change in capital over time? - ANSWER>>- The Statement of Equity Which of the following financial statements shows the balances of a company's assets, equity, and liability? - ANSWER>>- The Balance Sheet Which of the following financial statements provides aggregate data regarding all cash inflows a company receives from its ongoing operations and external investments? - ANSWER>>- The Statement of Cash Flow A seasonal business like Lou's Landscaping can have decreased cash during off-season months. Which financial statement would show the cash inflows and outflows for a particular month? - ANSWER>>- Cash Flow Statement Which of these accounts would have a balance of $0 at the beginning of each new accounting period? - ANSWER>>- Revenue A business owner performs a service and is paid when the job is performed. The owner would then enter this transaction into accounting software as: - ANSWER>>- A Sales Receipt A business owner performs a service but is not paid when the job is performed. Using their accounting software, the owner would enter the transaction as: - ANSWER>>- An Invoice True or False: The ending cash balance on the Statement of Cash Flow should not equal the cash balance reported on the Balance Sheet. - ANSWER>>- False A customer paid in advance for a service. They need to cancel the service. If the business owner wishes to apply that money towards the customer's next service, the owner would enter that transaction into their accounting software as: - ANSWER>>- A Credit Memo True or False: In order to complete a Statement of Equity, you will need the net profit from the Income Statement. - ANSWER>>- True True or False: Business owners should use the General Ledger to make business decisions. - ANSWER>>- False A Balance Sheet has four parts: a heading, assets, liabilities, and ______. - ANSWER>>- equity True or False: Financial reports should be produced before any adjustments have been made. - ANSWER>>- False An owner has deposited several payments they've received from customers into the business's bank account. The owner would then enter this transaction in their accounting software as: - ANSWER>>- A Bank Deposit After the Unadjusted Trial Balance is created, the process of going back and updating information is known as: - ANSWER>>- Making adjustments An owner brought in a piece of equipment for servicing and paid for the repair with a check. The owner would then enter the transaction into their accounting software as: - ANSWER>>- A Vendor Check The document that shows all of the account balances after adjustments have been made is known as: - ANSWER>>- The Adjusted Trial Balance Becky provided a service to a customer, and they have yet to pay. Which type of journal entry would need to be made? - ANSWER>>- An Accrual True or False: The depreciation of a vehicle is not something that can be entered as an adjustment. - ANSWER>>- False Which accounting assumption allows bookkeepers to break a company's financial life into smaller chunks of time? - ANSWER>>- The Periodicity Assumption Caren Cosmos is the world's most popular soft rock folk singer. She sold t- shirts online last year and made $7,000. The money from these sales went directly into her personal banking account which she used for her personal What is the general ledger purpose = contents - ANSWER>>means for keeping records of a company's total financial accounts assets, liabilities, equity, expenses, income or revenue (typically) 5 Bookkeeping Ethics - ANSWER>>1. objectivity 2. competence 3. integrity 4. confidentiality 5. professional conduct What is a liablity? - ANSWER>>Other's claims What is equity? - ANSWER>>Your claims Statement of Cash Flows - ANSWER>>A financial statement that provides financial information about the cash receipts and cash payments of a business for a specific period of time. 1. operating activities 2. investment activities 3. financing activities Statement of Equity - ANSWER>>Financial statement showing the beginning balance, additions to and deductions from, and the ending balance of the shareholders' equity account, for a specified period. Also called statement of shareholders equity. double-entry accounting - ANSWER>>The recording of debit and credit parts of a transaction Deferred Expense - ANSWER>>An asset created when a business makes advance payments of future expenses. accrued expenses - ANSWER>>expenses incurred but not yet paid in cash or recorded Deferred Revenue - ANSWER>>A liability created when a business collects cash from customers in advance of completing a service or delivering a product. Accrued Revenues - ANSWER>>revenues for services performed but not yet received in cash or recorded Accrual assumption - ANSWER>>Transactions are recorded using the accrual basis of accounting, where the recognition of revenues and expenses arises when earned or used, respectively. If this assumption is not true, a business should instead use the cash basis of accounting Conservatism Assumption - ANSWER>>When bookkeepers or accountants are uncertain and need to determine how to report an item, conservatism guides them to choose the option that shows less income or asset benefit. Potential losses can be recorded while potential gains cannot Consistency assumption - ANSWER>>The same method of accounting will be used from period to period, unless it can be replaced by a more relevant method. Economic Entity Assumption - ANSWER>>An assumption that every economic entity can be separately identified and accounted for. Going Concern Assumption - ANSWER>>The assumption that the company will continue in operation for the foreseeable future. Reliability Assumption - ANSWER>>Only those transactions that can be adequately proven should be recorded. Time Period Assumption - ANSWER>>Assumption that an organization's activities can be divided into specific time periods such as months, quarters, or years. Accrual Basis Accounting - ANSWER>>reporting income when it is earned and expenses when they are incurred Cash Basis Accounting - ANSWER>>Reporting income when the cash is received and expenses when the cash is paid. Natural Accounts - ANSWER>>the categories to which various costs are charged in the normal financial accounting cycle current assets - ANSWER>>cash and other assets expected to be exchanged for cash or consumed within a year long term assets - ANSWER>>assets that are expected to be used in business operations for longer than one year Accounts Receivable - ANSWER>>Amounts to be received in the future due to the sale of goods or services Accounts Payable - ANSWER>>Amounts to be paid in the future for goods or services already acquired Depreciation Expense - ANSWER>>The portion of the cost of a fixed asset that is recorded as an expense each year of its useful life. retained earnings - ANSWER>>An amount earned by a corporation and not yet distributed to stockholders. Payroll Form 941 - ANSWER>>Employer's quarterly federal tax return Payroll Form 940 - ANSWER>>Employer's Annual Federal Unemployment (FUTA) Tax Return W-2 / W-3 Tax Form - ANSWER>>Form you fill out that shows how much you have earned and paid in taxes What payroll forms are required to file with the state? - ANSWER>>Quarterly state unemployment insurance forms, annual state withholding forms What is the connection between equity and income statement? - ANSWER>>Whatever net income doesn't get paid out as dividends serves to increase equity what has future value? - ANSWER>>Assets wHAT IS OWED TO 3RD PARTIES? - ANSWER>>Liabilities what is a contra asset account? - ANSWER>>a type of asset account where the account balance may either be a negative or zero balance (ex: accumulated depreciation) time period principle - ANSWER>>to start a new year, the PNL accounts are reset to zero; a business must finish the full accounting process over a specific operating time period (a year) What is retained earnings? - ANSWER>>net income company has left over after it has been paid out to dividends to its shareholders Which report shows Accumulated Depreciation? - ANSWER>>Balance Sheet (asset) Depreciation Expense is shown on which report? - ANSWER>>PNL (Expense) what in an invoice? - ANSWER>>sent to customer AFTER they receive a product/service if you're recording monthly depreciation, which accounts will be affected and how? - ANSWER>>debit depreciation expense and credit accumulated depreciation what is a "payment on account" - ANSWER>>made for purchases on account where the customer has not yet received a bill or invoice can you have current and long-term liabilities on the Balance Sheet? - ANSWER>>yes True or false: the owner can claim assets even when there are outstanding liabilities - ANSWER>>false Equity or liability: dividends - ANSWER>>equity equity or liability: note payable - ANSWER>>liability equity or liability: common stock - ANSWER>>equity bill vs invoice - ANSWER>>bill = due now. invoice = due in future when do you debit (decrease) a credit card on cash basis? when you purchase the item? or when you pay off the credit card? - ANSWER>>when you purchase the item what type of account is capital? - ANSWER>>equity 3 reasons you could have a difference when reconciling the bank account - ANSWER>>1. you are trying to reconcile to the wrong ending balance 2. you are missing a transaction that has cleared the bank account 3. the amount you recorded the transaction for does not match the amount that shows on the bank statement is it likely that a journal entry adjustment will affect a credit card account when trying to reconcile? - ANSWER>>no what does a comparative income statement show? - ANSWER>>the income & expenses broken down to compare different years what should you do with uncleared checks when reconciling? - ANSWER>>leave them as they will likely clear on next month's statement what type of accounts do you reconcile? - ANSWER>>accounts for which you receive a statement (petty cash, credit card payable, checking acct, etc.) what is a NSF fee - ANSWER>>non-sufficient funds fee for when a payment bounces What is the book balance? - ANSWER>>includes any uncleared checks or deposits in transit what is an outstanding check? - ANSWER>>A check that has been issued by the company but has not been presented to the bank for payment. what type of accounts are NOT reconciled? - ANSWER>>Income, expense, COGS (any account w/out statements) what does a budget report show you? - ANSWER>>compares estimated expenses against actual expenditures